Homeplus plans spin-off sale of SSM business

(News1)

Homeplus Co., a South Korean big-box retailer undergoing court-led receivership, has submitted a rehabilitation plan to the court that includes the spin-off sale of its super supermarket (SSM) unit, Homeplus Express.

According to industry sources on Monday, Homeplus announced that it had submitted a “structural innovation” rehabilitation plan to the Seoul Bankruptcy Court earlier in the day.

The plan contains key measures such as selling its core business unit, Homeplus Express, and divesting some self-owned stores to improve cash flow.

The sale price of Homeplus Express is estimated at around 700 billion won.

The plan also includes shutting down up to 41 underperforming stores over the next six years and selling the main Homeplus entity prior to the completion of rehabilitation.

As cash flow has deteriorated this month, Homeplus has begun full-scale restructuring of some loss-making stores.

In terms of workforce management, the plan includes a redeployment strategy under which no additional hiring will be made when employees retire or resign voluntarily.

Instead, staff will be reassigned to other stores.

Homeplus has requested court approval for 300 billion won in debtor-in-possession financing to fund operations during the restructuring.

Such loans carry repayment priority over existing debt, a feature that could face resistance from creditors, while the availability of lenders willing to provide the financing remains uncertain.

The court is expected to begin procedures to seek consent from creditors and other stakeholders, a process that is likely to push the rehabilitation beyond this year.

Homeplus had earlier pursued a pre-approval merger and acquisition transaction but failed to secure a buyer, leading the company to move forward with a standalone restructuring plan.